Monday, June 27, 2005

Tsunamis, then pirates..

June 27, 2005latimes.com :BusinessGLOBAL REPORTAfter a Lull, Pirates Are Back in Strait of MalaccaAn upsurge in attacks on shipping along the vital waterway has raised concerns among insurers and area governments.By Arlen Harris and Stephen Fidler, Financial Times

Eight pirates armed with automatic weapons and knives fired warning shots at a Thai-flagged tanker in the Strait of Malacca early this month. Once on board, they kidnapped the master and boatswain and demanded a ransom.It was the fifth kidnapping for ransom in the strait since Feb. 28, said the International Maritime Bureau Piracy Reporting Center in Kuala Lumpur.

Piracy has long been rife in the seaway but the incident off Pangkor Island is part of a trend of increasingly violent and well-planned attacks that is worrying insurers and the region's governments. Some shipowners have even called in private security to protect their vessels.

After the December tsunami there was a lull in attacks in the strait, which sees half the world's oil and a quarter of all cargoes pass through it. Now incidents of piracy are rising again and security specialists say they are more likely to include kidnapping.The trend poses a threat to all shipping in the seaway, which has 55,000 ship movements a year. Kidnappers sometimes take senior officers and lock up the crew, leaving no one in charge of a moving vessel.Many pirates are rebels from Indonesia's Aceh province, says David Fairnie, a marine security specialist with Hart Security in Britain. The separatist Free Aceh Movement has denied involvement in piracy.

Fairnie says debriefing of freed captives suggests the hostage-takers are well organized, sometimes moving their hostages through several vessels before they are taken to Aceh.Last year about $1 million in ransom was paid by shipowners in the region. The average paid per kidnapping is estimated at $50,000. During the period 40 sailors were kidnapped in about 20 incidents in the strait and surrounding waters. Four were killed.

Protection and indemnity clubs — the mutual associations that cover 90% of merchant shipping tonnage — are reviewing coverage, say experts. An insurer's circular given to the Financial Times suggests that owners of ships sailing through the strait should take out a "comprehensive war policy" to insure hull and cargoes, and a kidnapping and ransom policy.The document, dated April 29, from the London-run Shipowners' Mutual Protection and Indemnity Assn., advised that its coverage "does not extend to include the payment of ransom demands and/or any loss or damage to the vessel or loss of earnings etc during a piracy attack." The association insures mostly smaller and specialist ships, the type most vulnerable to attack.

Charles Hume, chief executive officer designate, said the circular was a first draft and had not been sent. "The club is naturally sympathetic to any member facing a kidnap situation and will always try and assist in any way it can on a case-by-case basis," he said. "However, the club's rules which set out its written cover do not include cover for ransom payments."

The region's governments, with stretched resources, find it difficult to police the sea lanes, but are meeting more regularly to discuss the problem. Malaysia, Thailand and Indonesia have talked about the possibility of mounting a "hot pursuit" of pirates into neighbors' waters.

Singapore has in the past asked for U.S. help.This month, in a change of tack, Malaysia's defense minister said that he would welcome foreign security assistance.

Some shipowners have turned to private security companies for armed protection. A handful of such companies, including Hart, Glenn Defense Marine and Background Asia Risk Solutions, is offering services to shipowners in the region. Alex Duperouzel, Background Asia's founder and managing director, said: "Our whole strategy is based around the idea of deterrence. We are trying to tell people that we are armed and serious and that there are easier targets elsewhere."

But the presence of armed private security forces in their waters worries the region's governments, particularly Malaysia."These people may not be well-trained or they could be trigger-happy," said Najib Razak, Malaysia's deputy prime minister. "So we have to monitor this very, very carefully."Wrap.